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THE economic contraction experienced in Australia because of the COVID-19 pandemic could move people away from long-term financial commitments and prove beneficial to businesses offering short-term use of capital equipment.

Australian car subscriber Carly this week announced a 15 per cent increase in business for the March quarter compared with the December quarter.

The CEO of Carly parent company Collaborate Corporation, Chris Noone, said the increase was also 78 per cent up in the latest March quarter compared with the corresponding March quarter in 2019.

“It is predicted by the Reserve Bank of Australia that COVID-19 will cause a contraction of the Australian economy and this may cause businesses and consumers to seek to de- risk their financial situation by limiting long-term financial commitments,” he said.

“This presents an opportunity for Carly car subscription to provide consumers and businesses with vehicles without the long-term financial commitment and risk normally associated with lease, loan and outright purchase.

Chris Noone

“It is likely that concern about the economy will accelerate the shift to car subscription and Carly is positioned to benefit from this shift, even in an environment of slow economic growth.”

He said the pandemic was changing perceptions of long-term financial commitments and people were looking for more flexible ways of having a vehicle.

During the March quarter, the value of Carly’s rental transactions rose 26 per cent compared with the December quarter, while there was a 38 per cent increase in subscriptions booked.

Mr Noone said that while there was some volatility in the demand for Carly car subscription because of COVID-19 “it has been far less than compared to car rental and rideshare rental revenue streams.”

“Despite the current economic challenges, Carly’s flexible vehicle access is an appealing and low-risk solution for Australian businesses and consumers,” he said.

“We think that the shift to car subscription that started in 2019 will now accelerate even faster.”

Carly’s subscription service removes the need to use finance to access a car and packages the cost of car registration, roadside assistance, comprehensive insurance, CTP and maintenance into one monthly subscription. Subscriptions can be stopped with 30 days notice without penalty; providing greater financial freedom and lower risk.

By Neil Dowling

Manheim
Branded Financial
Schmick